technology – TheNewsHub

Smart ring leader Oura plans international push as CEO touts new features and thinking on hardware

Harsh — Thu, 14 Nov 2024 07:55:47 +0000

The Oura Ring 4

Courtesy: Oura

LISBON — Samsung’s foray into smart rings isn’t concerning the boss of the product category’s pioneer, Oura — in fact, Tom Hale says he’s seeing a boost in business.

“I’m sure that a major tech company making an announcement saying: ‘Hey, this is a category that matters. It’s going to be something that’s big.’ I think it’s probably helpful,” Hale told CNBC in an interview this week.

“In terms of the impact on our business, it has made zero impact. If anything, our business has gotten stronger since their announcement.”

In a wide-ranging interview with CNBC at the Web Summit conference in Lisbon, Hale discussed Oura’s plans for new areas of insight it wants to give users, how he is thinking about new devices and the company’s intentions for international expansion.

Oura’s flagship product is the Oura Ring 4, a device known as a smart ring. It is packed with sensors that can track some health metrics, allowing Oura app users to learn more about the quality of their sleep or how ready they are to tackle the day ahead.

Founded in Finland in 2013, the company has been called a pioneer by analysts in the smart ring space. Oura said it has sold more than 2.5 million of its rings since it launched its first product. CCS Insight forecasts Oura will end the year with a 49% market share in smart rings.

Competition is starting to rear its head in the space. The world’s largest smartphone maker Samsung made its first venture into smart rings this year with the Galaxy Ring, which some analysts say has put the device category on the map and popularized it with a broader audience.

Hale is keen to position Oura as a “health company and a science company from the get-go,” with the aim of its product being “clinical grade.” Oura is seeking approval from the U.S. Food and Drug Administration (FDA) for its ring to be used for diagnostics, although Hale declined to provide too many further details.

He did say that Oura’s focus on health and science is what sets it apart from competitors.

“If you’re actually thinking [of] yourself as a healthcare company, it is very different in many ways and different postures you might take towards data privacy. … So instead of being like a tech company where data is some sort of oil to be extracted and then used to create some kind of advantage of network effects, we’re really a healthcare company where your data is sacrosanct,” Hale said.

Oura’s business model relies on selling the hardware, as well as on a $5.99 monthly subscription service that allows users to get the insights from their ring. Oura says it has nearly 2 million subscribers.

“We look more like a software company than we do look like a hardware company. And I think that’s a function of the business model, and the fact that it’s working. Our subscribers are continuing to pay,” Hale said.

Apple and Samsung, Oura is looking at ways it can use the advancing capabilities of artificial intelligence to give users more personalized insights. Smartphone makers have spoken about so-called “AI agents,” which they see as assistants that are able to anticipate what a user wants.

Oura is testing out an AI product called Oura Advisor in a similar vein.

“Think of it as the doctor in your pocket that knows all the data about you,” Hale said.

International push

Hale‘s presence at the Web Summit in Lisbon underscores his push to raise Oura’s brand awareness in markets outside of the U.S., especially as more people learn about smart rings.

“I think the point about the category being something that people are learning about, the unique benefits of that maturity, is in our favor. We’re expanding internationally,” Hale said.

He said he is particularly “excited” about venturing into Western Europe, including in countries like the U.K., Germany, France and Italy. Looking even further forward, Hale said an initial public offering for the business is not currently on the table, adding that operating as a private company gives Oura more “freedom.”

“I really enjoy the freedom that we get as a private company. We’re accountable to our investors and our shareholders, but they’re willing to let us operate with a lot license,” he said. “And if we decided we wanted to turn unprofitable because we wanted to invest in owning some category of healthcare software, it’ll be fine. They would be happy for that.”

Rocket Lab stock pops 25% after company reports strong revenue growth, first Neutron deal

suimt — Tue, 12 Nov 2024 23:43:08 +0000

A view of Rocket Lab’s HASTE suborbital launch vehicle.

Rocket Lab

Rocket Lab shares jumped in post-market trading after the company reported third-quarter results and announced its first customer for its coming Neutron vehicle.

The space infrastructure company reported third-quarter revenue increased to $104.8 million, up 55% from $67.6 million for the same period a year ago, and above Wall Street’s expectation of $102 million, according to analysts surveyed by LSEG.

Its net loss also increased year over year, to $51.9 million from $40.6 million, but its loss of 10 cents per share came in slightly below analyst expectations of a loss of 11 cents a share.

Rocket Lab forecast fourth-quarter revenue between $125 million and $135 million, which at the midpoint would see the company bring in about $430 million this year.

Additionally, the company announced its first launch deal for its Neutron rocket.

A “confidential commercial satellite constellation operator” signed for two missions in mid-2026, which Rocket Lab said were at a price “consistent with our target” for the vehicle. Previously, the company said it was targeting a price point of about $50 million per Neutron launch.

Shares of Rocket Lab jumped as much as 25% in after-hours trading, up from its close at $14.66 a share. The stock has been flying up the past three months, nearly tripling over that period.

Wall Street expects Trump presidency will unlock deal-making

suimt — Thu, 07 Nov 2024 17:43:11 +0000

Attendees cheer as a broadcast of former US President and Republican presidential candidate Donald Trum speaking at his Florida election party is shown on a screen at the Nevada GOP election watch party in Las Vegas, Nevada on November 6, 2024.

Ronda Churchill | Afp | Getty Images

Wall Street dealmakers and corporate leaders expect the flood gates to open on merger and acquisition activity after President-elect Donald Trump takes office in January.

And he’ll likely have congressional help. Trump defeated Democratic candidate Vice President Kamala Harris, and Republicans claimed a majority of the Senate in elections this week. That red wave is expected to spell loosening regulations on deal-making, with plenty of pent-up demand.

“We know kind of where the world is headed in a Trump environment because we’ve seen it before,” said Jeffrey Solomon, president of TD Cowen, on CNBC’s “Money Movers” Wednesday. “I think the regulatory environment will be much more conducive to economic growth. There will be lighter and targeted regulation.”

Solomon added that the scaled-back regulation will be focused on certain areas “of particular interest to the Trump administration,” rather than a broad based reassessment of the entire landscape.

In recent years, there has been greater scrutiny of pending deals by the Biden administration’s Department of Justice and Federal Trade Commission, headed by Chair Lina Khan. Some have pointed to that dynamic as a chilling factor on deal flow. High interest rates and soaring company valuations have contributed, too.

Khan said in September that “when you see greater scrutiny of mergers, you can see greater deterrence of illegal mergers.” Her hard line has drawn harsh criticism, but now, there’s optimism around a forthcoming FTC with a lighter hand.

“Assuming interest rates drop and you see corporate tax rates go down, the ingredients are there for a really active M&A market,” said one top dealmaker, who talked to CNBC on the condition of anonymity to speak candidly.

On Wednesday, markets rallied on the Republican presidential win, with the Dow Jones Industrial Average soaring 1,500 points to a new record high.

divest diagnostic test maker Grail after heated battles with the FTC and European antitrust regulators.

Also last year, the FTC blocked Sanofi’s proposed acquisition of a drug in development for Pompe disease, a genetic condition, from Maze Therapeutics. Sanofi ultimately terminated that deal.

“Whether or not Lina Khan is bounced day one is a key consideration, but even if fewer changes at the FTC take place, there is no doubt this administration — at least on paper — will be far more amicable when it comes to business combinations,” Jared Holz, Mizuho health-care equity strategist, said in an email on Wednesday.

One top dealmaker expected an M&A uptick broadly, but agreed that pharmaceuticals and the financial sector were particularly poised for a resurgence. That deal-maker also noted that with the Senate flipping, more outspoken antitrust voices like Sen. Elizabeth Warren, D-Mass., could find it more difficult to push for DOJ or FTC investigations.

In the financial sector regional banks recognize the need for scale, making them likely candidates for consolidation, said one former industry executive, noting that smaller banks had been getting gobbled up for “some time.” That person expects the pace and size of those acquisitions to ramp up under a Trump presidency.

Other industries, such as tech, may still face an uphill battle in getting deals done.

One M&A advisor, who also spoke to CNBC anonymously, noted that Trump’s disdain for Big Tech companies — historically active deal-makers — might keep them on the sidelines. On Wednesday, tech leaders took to social media to congratulate Trump.

Apparent GOP opposition to the CHIPS Act means that semiconductor consolidation might be challenging, the advisor noted, while cautioning it is still too early to know what a Trump presidency would mean. CNBC previously reported that Qualcomm recently approached Intel about a potential takeover.

“I think the simplest way to put it is more deals, less regulation with the administration having its thumb on the scale, perhaps with a willingness to pick winners and losers,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investments.

Kroger’s bid to take over grocery chain Albertsons could have a better chance of getting approved under Trump, as could Tapestry’s proposed acquisition of Capri.

The merger between Kroger and Albertsons is currently under review by a federal judge, while Tapestry is working to appeal a federal order that granted the FTC’s motion for a preliminary injunction against the tie-up.

“The hostile approach of the FTC to mergers and acquisitions will almost certainly be reset and replaced with a worldview that is more favorable to corporate dealmaking,” said GlobalData managing director Neil Saunders. “This does not necessarily mean that big deals like Kroger-Albertsons will be waved through, but it does mean others like Tapestry-Capri will receive a far warmer reception than they have under the Biden administration.”

Meanwhile, ongoing turmoil in the media industry has led many to consider consolidation as the next step for the sector.

Warner Bros. Discovery CEO David Zaslav on Thursday highlighted opportunities that could come up if regulations were to loosen, doubling down on comments he made earlier this year at Allen & Co.’s annual Sun Valley conference.

“We have an upcoming new administration. … It’s too early to tell, but it may offer a pace of change and opportunity for consolidation that may be quite different, that would provide a real positive and accelerated impact on this industry that’s needed,” Zaslav said on an earnings call.

Broadcast station group owner Sinclair on Wednesday echoed a similar sentiment.

“We’re very excited about the upcoming regulatory environment,” CEO Chris Ripley said during an earnings call. “It does feel like a cloud over the industry is lifting here.”

Still, the track record between the previous Trump administration and the Biden administration for media industry deals is split.

Trump’s DOJ allowed Disney to buy Fox’s assets, but then sued to block AT&T’s deal for Time Warner.

Under the Biden administration, Amazon’s $8.5 billion deal for MGM and the merger of Warner Bros. and Discovery Communications were both waved through, but a federal judge blocked the $2.2 billion sale of Simon & Schuster to Penguin Random House.

Skydance Media and Paramount Global agreed to merge earlier this year and expect to receive regulatory approval in 2025.

Qualcomm pops on chipmaker's earnings and revenue beat

Aseem — Wed, 06 Nov 2024 22:19:33 +0000

Qualcomm CEO Cristiano Amon speaks at the Computex forum in Taipei, Taiwan, June 3, 2024.

Ann Wang | Reuters

Qualcomm reported fourth-quarter earnings on Wednesday that beat Wall Street expectations for earnings and revenue, and the company guided to a strong December quarter.

The shares rose 10% in extended trading at one point before falling to a gain of about 4%.

Here’s how the company did versus Refinitiv consensus expectations for the quarter ending Sept. 29:

Earnings per share: $2.69, adjusted $2.56 expected
Revenue: $10.24 billion versus $9.90 billion expected

Qualcomm said it expects revenue in the current quarter of between $10.5 billion and $11.3 billion, with the midpoint of that range beating LSEG consensus expectations of $10.59 billion.

The company reported $2.92 billion in net income, or $2.59 per share, a sharp jump from last year’s $1.49 billion, or $1.23 per share. Qualcomm reported $33.19 billion in total revenue in its fiscal 2024, a 9% increase from 2023.

Qualcomm’s fortunes have historically been tied to the smartphone industry, where the company provides a range of chips to handset makers, including system-on-a-chip processors, modems, and antennas. The company makes the chip at the heart of most high-end Android devices, and many lower-end phones as well. Qualcomm also sells modems and related chips to Apple for its iPhones, and last year said its contract for 5G chips ran through 2026.

Qualcomm reported a 12% increase in handset chip sales to $6.1 billion, in line with FactSet estimates. Qualcomm introduced its high-end chip for 2025, called Snapdragon 8 Elite, in October.

“In handsets we delivered greater than 20% year-over-year growth in Android revenues,” said Qualcomm CFO Akash Palkhiwala on a call with analysts.

Under CEO Cristiano Amon, the company has diversified away from being a smartphone supplier and has introduced and invested heavily in producing chips for PCs, cars, and industrial machines.

“We will continue to transform Qualcomm from a wireless communications company into a connected computing company for the age of AI,” Qualcomm CEO Cristiano Amon said on an earnings call with analysts.

Qualcomm has also made efforts to brand itself as a leader in AI, having developed smartphone chips with specialized parts for machine learning since 2017. But unlike Nvidia, the company doesn’t produce the kind of graphics processors for data centers that are used for big AI programs like OpenAI’s ChatGPT.

The automotive business grew 86% on an annual basis to $899 million in sales. Qualcomm says it has billions of dollars in business with automakers currently in its development pipeline, and highlighted it was the fifth consecutive quarter of growth. Qualcomm said that it expected automotive sales in the current quarter to rise 50% on an annual basis.

The company’s “internet of things” business includes both chips for industrial purposes as well as the chips Meta uses in its Quest handsets and Ray-Ban Smart Glasses. It also includes the new business selling chips for laptops running Microsoft Windows. The division reported $1.68 billion in revenue, a 22% increase from a year earlier.

Qualcomm’s chip business, including its handset, automotive, and other chips, which together is reported as QCT, saw sales rise 18% during the quarter to $7.37 billion in total.

The company’s profitable technology licensing business, QTL, reported $1.52 billion in revenue, a 21% increase over the same period last year.

Qualcomm said its board had approved $15 billion in additional buybacks. During the fourth quarter, it repurchased $1.3 billion worth of shares and paid out $947 million in dividends.

WATCH: CNBC’s full interview with Qualcomm CEO Cristiano Amon

British regulator says $19.5 billion Vodafone-Three merger could go ahead if remedies are adopted

Aseem — Tue, 05 Nov 2024 10:37:51 +0000

A pedestrian walks past a Vodafone store in central London on May 16, 2023. British mobile giant Vodafone is to axe 11,000 jobs over three years in the latest cull to hit the tech sector, as new boss Margherita Della Valle slammed recent performance.

Adrian Dennis | AFP | Getty Images

LONDON — British telecom firms Vodafone and Three’s multibillion-pound merger could go ahead if the companies adopt a series of proposed remedies to clear competition concerns, regulators said Tuesday.

In a statement, the Competition and Markets Authority said that the £15 billion ($19.5 billion) deal is likely to be approved, if Vodafone and Hong Kong-based CK Hutchison’s Three proceed with billions of pounds of investment into British telecom infrastructure and add short-term customer protections.

Vodafone has previously said that the combined entity, once merged, would invest £11 billion ($14.46 billion) into U.K. telecommunications infrastructure.

Among the conditions required for the deal to go through are:

a legally mandated commitment, overseen by telecom watchdog Ofcom and the CMA, to deliver on their joint plan to upgrade and improve networks over the next eight years across the U.K.
maintaining certain existing mobile tariffs and data plans for at least three years for both current and future Vodafone and Three customers, including their sub-brands
pre-agreed prices and contract terms to ensure mobile virtual network operators (MVNOs) — carriers that use network infrastructure from third-party operators — can still get competitive wholesale deals

Stuart McIntosh, chair of the CMA inquiry group leading the investigation, said the regulator believes the Vodafone-Three merger has the potential to be “pro-competitive” for the U.K. mobile sector, if its concerns are addressed.

“Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger,” McIntosh said in a statement Tuesday.

Vodafone and Three hold that the CMA’s remedy framework “provides a path to final clearance,” a Vodafone spokesperson told CNBC via email Tuesday.

“The merger will be a catalyst for positive change. It will bring significant benefits to businesses and consumers throughout the UK, and it will bring advanced 5G to every school and hospital across the country,” the Vodafone spokesperson said.

The CMA said its final decision on the merger is due by Dec. 7.

The CMA provisionally found in September that the Vodafone-Three merger could lead to higher prices for customers and harm competition among MVNOs, such as Sky Mobile, Lyca, Lebara and iD Mobile. Following the provisional findings, the watchdog consulted on potential solutions to address its concerns.

Vodafone first announced its agreement with CK Hutchison to merge with Three in June last year. Vodafone would own 51% of the combined business, leaving CK Hutchison with the rest.

The deal, which marks one of the first major U.K. telecom consolidation efforts in several years, would reduce the number of mobile operators in the country to just three. Vodafone and Three were lagging behind larger rivals EE, which was bought by BT in 2016, and behind O2, which is owned by Telefonica and Liberty Global.

Vodafone argues the deal is justified since U.K. digital infrastructure is lagging behind other major economies, highlighting the need for increased investment in areas like next-generation 5G networks and broader coverage to more parts of the country.

Vodafone has also said it disagrees with earlier findings from the CMA that the merger would lead to price increases for consumers. It says the merger wouldn’t pricing strategy and would enhance competition between mobile virtual network operators, or MVNOs.

Kester Mann, director of consumer and connectivity at technology research firm CCS Insight, said that the CMA’s announcement of Tuesday marked a “big step forward” for the two telecoms giants to complete their deal to merge.

“Approval would mark one of the most significant developments in the history of UK mobile, heralding the arrival of a new market leader with over 29 million customers,” Mann said in emailed comments.

“The watchdog’s statement won’t be welcomed by all. BT and Sky Mobile have sternly opposed the deal and are likely to vociferously attempt one final time to have it blocked before the CMA’s final deadline in less than five weeks,” Mann added.

BT, the U.K.’s largest telecoms network provider, has previously said that the proposed merger would created an entity with “disproportionate share of capacity and spectrum, unprecedented in U.K. and Western European mobile markets.”

BT said it thinks the deal would “substantially lessen competition and deter investment.”

Apple commits $1.5 billion to Globalstar for expanded iPhone satellite services

suimt — Fri, 01 Nov 2024 20:19:09 +0000

Apple committed about $1.5 billion to satellite communications company Globalstar to fund the expansion of iPhone services, the companies disclosed in a securities filing on Friday.

The tech giant’s deal with Globalstar includes $1.1 billion in cash, of which $232 million will go toward the satellite company’s current debt, and a 20% equity stake. The deal is expected to close on Tuesday.

Apple has already been spending hundreds of millions for Globlastar services, which enabled the 2022 rollout of iPhone emergency satellite texting.

It is one of several efforts in the direct-to-device, or D2D, satellite connectivity market — which provides service to unmodified devices such as smartphones directly from space — with other projects underway from SpaceX, AST SpaceMobile, Iridium, Lynk and EchoStar.

Globalstar stock jumped 31.4% in Friday trading to close at $1.38 a share.

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Losing GPS could cost billions, so the Space Force is having companies like Astranis build a backup network

suimt — Fri, 01 Nov 2024 18:00:01 +0000

A depiction of Nexus satellites in a medium Earth orbit constellation.

Astranis

The U.S. Air Force began deploying the Global Positioning System — more commonly known as GPS — nearly 50 years ago, satellites which have become critical infrastructure for both the military and the economy.

Since then, GPS is estimated to have generated more than $1.4 trillion in economic benefits, according to a Commerce Department study. But the agency warned that an “outage could potentially have an economic impact of $1 billion a day.”

Pentagon leaders believe those losses are a conservative estimate, leading the U.S. Space Force to kick off a roughly $2 billion satellite program known as the Resilient Global Positioning System. Called R-GPS for short, the program is intended to provide an alternative, backup network for the current satellite system.

“[GPS is] vitally important to everything we do day-to-day, from the stock market, for timing of every transaction, to the crops we field,” Lt. Col. Justin Deifel, leader of R-GPS at the Space Force’s Space Systems Command, told CNBC.

“It’s like water and electricity. … It’s a utility of the economy and a utility of a warfighter that we need to make sure is available,” Deifel added.

first satellite malfunctioned last year due to a third-party issue with its solar arrays, the company’s experience operating in the distant geosynchronous orbit has Gedmark confident about its chances in the R-GPS program.

“We are the only company that has proven on orbit a spacecraft of this class — a low cost, [radiation]-hardened satellite for high orbits,” Gedmark said.

Piyush Goyal wraps up Saudi visit, invites global investment in India’s high-tech sectors

Aseem — Fri, 01 Nov 2024 10:58:30 +0000

New Delhi: Union minister for commerce and industry Piyush Goyal concluded a visit to Saudi Arabia, urging global investors to tap into India’s rapidly growing high-tech sectors—artificial intelligence, renewable energy, digital infrastructure, and advanced manufacturing—which he highlighted as promising areas for investment, the ministry said on Friday.

Goyal, who highlighted the critical role of international partnerships and economic diplomacy in fostering global cooperation, innovation, technological advancement, and investment during his visit, participated in the plenary session of the Future Investment Initiative (FII), with representatives from global governments and the industry.

During his visit, Goyal co-chaired the second ministerial meeting of the economy and investment committee under the India-Saudi Strategic Partnership Council (SPC) with Saudi Arabia’s minister of energy Prince Abdulaziz bin Salman Al-Saud, in Riyadh.

SPC with Saudi

Established in 2019 following prime minister Narendra Modi’s visit to Saudi Arabia, the SPC aims to deepen economic cooperation between the two nations across various strategic sectors.

“The committee reviewed the progress achieved by the four Joint Working Groups: Agriculture and Food Security; Energy; Technology and Information Technology; and Industry and Infrastructure,” the ministry said in a statement.

“They noted the deepening of bilateral economic partnership between India and Saudi Arabia and deliberated on ways to enhance trade and investment,” it added.

Goyal also met the ministers of energy, industry and mineral resources, and investment during his Saudi Arabia visit.

“These engagements focused on collaborative initiatives in trade, energy, and technology. These discussions culminated in a series of actionable agreements, aimed at enhancing trade volumes and facilitating a smooth flow of investments between the two countries,” the ministry said.

Meetings with ministers, global CEOs

“The agreements emphasise cooperation in energy transition, digital transformation, and the exchange of expertise to accelerate economic growth,” it added.

Goyal also met with Peter Herweck, CEO of Schneider Electric, and William E. Ford, chairman and CEO of General Atlantic, to discuss India’s economic landscape and investment opportunities across sectors.

Bilateral agreements between India and Saudi Arabia have grown in recent years, spanning sectors like food exports, pharmaceuticals, energy, and electronic manufacturing.

Both countries are exploring collaborations in emerging sectors such as fintech, clean hydrogen, and energy efficiency.

These partnerships aim to build a robust and diversified economic foundation, with the committee meeting reaffirming their dedication to mutual progress.

Odop initiative

During his visit, Goyal unveiled the One District, One Product (Odop) Wall, featuring unique products from various districts across India at the Indian embassy in Riyadh.

“The Odop initiative, part of the government’s “Vocal for Local” campaign, aims to promote regional craftsmanship by showcasing the rich cultural heritage of India through distinctive, high-quality products,” the ministry said.

“This visit marks a significant milestone in strengthening the strategic partnership between India and Saudi Arabia. It underscores both nations’ commitment to deepening economic ties and addressing global challenges through collaborative efforts. The outcomes of the discussions are expected to unlock new avenues for investment and trade, driving economic growth and innovation in both countries,” it added.

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Comcast's potential cable networks separation will test the appetite for media reconfiguration

suimt — Thu, 31 Oct 2024 21:27:32 +0000

Mike Cavanagh, president of Comcast Corporation, at center, during the Allen & Company Sun Valley Conference in Sun Valley, Idaho, July 12, 2023.

David A. Grogan | CNBC

Comcast is thinking about separating or spinning off NBCUniversal’s cable networks. If it moves forward with the idea, it could lay the groundwork for a reconfiguration of the entire American media landscape.

The logic for Comcast is fairly straightforward. NBCUniversal’s cable networks aren’t growing anymore. The company’s energy and focus is on promoting Peacock, NBCUniversal’s growing but still money-losing streaming service. Carving out the cable portfolio could placate Comcast investors by removing declining assets from the balance sheet.

Comcast shares gained more than 3% on Thursday after the company’s third-quarter earnings release and conference call.

“We are now exploring whether creating a new well-capitalized company, owned by our shareholders and comprised of our strong portfolio of cable networks, would position them to take advantage of opportunities in the changing media landscape and create value for our shareholders,” Comcast President Mike Cavanagh said during the call. “We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions.”

Though executives stressed that the exploration is in the very early stages, it could be a prelude to broader industry consolidation. NBCUniversal’s cable networks, which include Bravo, E!, Syfy, Oxygen True Crime and USA Network, as well as news networks MSNBC and CNBC, could be merged with another media company or could be a catalyst for a rollup, or consolidation, of cable channels at a number of different companies.

The idea of a rollup isn’t new. It’s something media mogul John Malone discussed way back in 2016 when Lionsgate acquired premium network Starz.

“Lionsgate could buy Starz and potentially other free radicals in the industry,” Malone said at the time, referring to cable network groups not owned by larger media conglomerates such as AMC Networks, which is controlled by the Dolan family, or A&E Networks, which is co-owned by Hearst and Disney.

That vision never materialized, in part because the media world’s attention shifted from traditional pay TV to streaming, which devalued cable networks. Earlier this year, Warner Bros. Discovery reported a noncash goodwill impairment charge of $9.1 billion, triggered by the reevaluation of the book value of its TV networks segment.

Still, the loss of value for cable networks has now led to a new opportunity for a rollup, if companies such as Comcast, Warner Bros. Discovery and Disney decide they want to shed declining cable assets in favor of focusing on streaming.

Thus far, media companies have opted to keep their cable networks, which still pump out billions in profit even as millions of Americans cut the cord each year.

Comcast may set a template if it moves forward with a spin and sees a spike in its overall valuation.

Ironically, Starz could again play a role in a media shakeup. The small media company wants to be the vehicle for a cable network rollup, CNBC reported in 2022. Starz is set to separate from Lionsgate at the end of 2024.

There’s broad uncertainty about whether a company that consists of only cable networks has a viable path forward as a publicly traded entity. Equity investors typically aren’t fans of declining assets, even if they’re cash rich.

But even if Starz doesn’t achieve its vision of a cable network rollup, it’s possible a private equity firm may have interest in harvesting a group of cable networks for cash. Apollo Global Management, for one, had late interest in acquiring Paramount Global and has made several media-related investments in recent years, including buying Yahoo.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

Palo Alto shares helped by contract news, Abbott Labs braces for lawsuit ruling

Harsh — Thu, 31 Oct 2024 18:50:48 +0000

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Wall Street is under pressure Thursday, led to the downside by the tech-heavy Nasdaq Composite , which dropped more than 2%. The S & P 500 is down more than 1%, while the Dow Jones Industrial Average lost about 260 points, or 0.6%. Selling in Microsoft and Meta Platforms following their Wednesday evening earnings results weighed on the Nasdaq and S & P 500. Also adding to the weakness: The yield on the closely watched 10-year Treasury note continued its climb higher, topping 4.3% at one point in the session. Investors are gearing up for Friday morning’s nonfarm payrolls report, which is expected to show the U.S. economy added 100,000 jobs in October while the unemployment rate remain unchanged at 4.1%. But many expect noise in the numbers due to the impact of the recent hurricanes and Boeing strike. The data will help shape Wall Street’s expectations around the path of Federal Reserve policy. Currently, traders are pricing in a roughly 95% chance of a quarter-point interest rate cut at the central bank’s meeting next week. Earlier Thursday, the Fed’s favorite inflation gauge, the PCE price index, matched expectations, rising 2.1% in September . Cyber deal: Morgan Stanley put out a note Thursday morning on Club holding Palo Alto Networks that caught our eye, discussing reports of the cybersecurity leader landing a five-year, roughly $1 billion software licensing agreement with the Department of Defense. An executive at Palo Alto Networks also posted about it on LinkedIn , without mentioning the dollar amount and duration. “While timing of bookings or revenue recognition isn’t clear yet, we think this could provide multi-year tailwinds,” Morgan Stanley analysts wrote to clients. These headlines could be helping support shares of Palo Alto in Thursday’s down market. The stock rotated between slight gains and losses, holding up much better than an exchange-traded fund that tracks the cybersecurity industry , which dropped more than 1% in the session. Shares of our other cyber holding, CrowdStrike , were down nearly 4% Thursday. To be sure, Morgan Stanley sought to temper expectations on the reported Palo Alto deal. The firm noted, for example, that the contract was awarded through software reseller Carahsoft, which means it “likely includes ~15% reseller margin for Carahsoft.” Nevertheless, analysts said they “think this contract award … suggests the large but elusive DoD opportunity could finally be coming into fruition.” Palo Alto did not respond to CNBC’s request for comment on the licensing agreement. The company experienced some softness in its federal government business earlier this year and also tamped down expectations about the next few quarters, which added to the messiness in its February earnings report. More recently, on an August earnings call, Palo Alto CEO Nikesh Arora said the company continued to have “a muted set of expectations” around its federal government business due to the election. Trial decision looms: We’re bracing ourselves for a verdict soon in Abbott Labs ‘ latest trial over allegations that its specialized premature infant formula causes an intestinal illness commonly abbreviated as NEC. The company has strongly denied the claims, and recently received the backing of major U.S. health agencies, which in a statement earlier this month came out in support of using the formulas like Abbott’s to treat premature infants. “There is no conclusive evidence that preterm infant formula causes NEC,” the agencies wrote. However, the judge in Abbott’s trial — held in the 22nd Judicial Circuit of Missouri — did not allow that statement to be shown to jurors in the case . For that reason, we’re not expecting the Club holding to receive a favorable verdict. A loss in the case could ding the stock, but that could represent a buying opportunity, according to Director of Portfolio Analysis Jeff Marks. The reason is that while Abbott faces additional lawsuits over its formula, we expect the statement from U.S. health agencies will be allowed as evidence in future cases. Up next: Apple , Amazon and Coterra Energy are set to report quarterly results after the closing bell Thursday. Outside the portfolio, we’ll also hear from Intel , U.S. Steel and Juniper Networks . As mentioned, the big event Friday is the October nonfarm payrolls report. Chevron , Exxon Mobil and chemical maker LyondellBasell Industries are among the notable earnings reports Friday. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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